Some finance chiefs specialize in shepherding a company through an initial public offering. Others arrive in the aftermath of one with the purpose of guiding the newly public business to a higher level of maturity.
Charles “Lanny” Baker, who was appointed chief finance officer of Eventbrite Inc. about a year after its market debut, falls into the latter category. He joined the San Francisco-based event-ticketing company in September from online-review marketplace Yelp Inc., where he served as CFO after the company had been public for a few years.
After an IPO, the pressure CFOs face to prepare a company for quarterly disclosures is replaced with a different set of obstacles. At Eventbrite, Mr. Baker is tasked with applying simplicity and focus to the financial operations as the company deals with a slumping stock price and the need to lure new customers.
Being a CFO after an IPO offering is not necessarily easier than navigating a company through one. In an interview, Mr. Baker said he has learned that CFOs who are new to the public market should work to ensure the operational issues they consider internally are the same ones they stress when communicating with investors and analysts. “I’ve worked at companies where there has been that sort of metric-setting mismatch,” he said.
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And Eventbrite has its own challenges: The company is looking to boost its base of more than one million event creators and to maintain the customers it picked up in an acquisition of Ticketfly as it moves closer to fully integrating the company into its own. Eventbrite holds a cautious outlook about customer retention in fourth quarter because it’s a big change for customers to switch platforms, Mr. Baker said during a November earnings call.
In some cases, streamlining efforts have translated into a reevaluation of financing. For example, Mr. Baker intervened on his team’s renegotiation of a $60 million term loan it secured in 2017 for the TicketFly acquisition and opted to repay it instead, citing the company’s improved liquidity after the IPO, he said.
“Today is about taking stock of activities and using the CFO’s line-item veto to say what’s not going to drive our long-term growth,” Mr. Baker said.
The company also needs a CFO who can help incentivize and build out the company’s sales force—something Mr. Baker was known for doing at Yelp, said Mark Mahaney, an analyst at RBC Capital Markets.
Before Yelp, Mr. Baker was chief executive of online real-estate brokerage company ZipRealty Inc., which was acquired by Realogy Holdings Corp. during his time there. He was also a longtime research analyst covering media and technology companies, giving him the tools needed to scrutinize companies’ books, analysts said.
Eventbrite bought ticketing service Ticketfly from Pandora Media LLC in 2017. The service suffered a large data breach the following year, which led to delays in the integration into Eventbrite’s operations.
The data breach, the delayed integration of Ticketfly and the company’s lowering of analysts’ financial expectations contributed to a rise in investor concern. Shares have materially underperformed since March 2019. They fell as low as $15 in June, a drop from the mid-to-high $30s after the September 2018 IPO and below its $23 offering price.
Eventbrite’s stock has barely recovered, hovering at about $20 per share for the past month. Nevertheless, revenue climbed 11.4% to $82.1 million in the third quarter year-over-year.
“The biggest challenge for Lanny is to regain investor trust and credibility,” said Youssef Squali, an analyst at SunTrust Robinson Humphrey Inc. “To do that, there’s no shortcut. You basically have to perform consistently over the next several quarters.”
Write to Mark Maurer at mark.maurer@wsj.com
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December 26, 2019 at 07:00PM
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Eventbrite’s New CFO Looks to Stabilize Company After Ticketfly Integration, IPO - Wall Street Journal
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